Warren Buffett‘s net worth has dropped substantially this year, pushing him down the ranking of the world’s wealthiest people. The decline has coincided with the weakness in Berkshire Hathaway (NYSE:BRK), which has underperformed the broader market.
Warren Buffett’s Net Worth Has Dropped This Year
Bloomberg data shows that Buffett’s net worth has dropped by $8.3 billion this year to $143 billion. This drop makes him the tenth-richest person in the world.
Most of Buffett’s wealth is derived from his large stake in Berkshire Hathaway, the conglomerate he controls. He has an economic interest of about 15% in the company, whose market capitalization has jumped to over $1.08 trillion.
Berkshire’s stock has come under pressure this year. After peaking at $537 in August, the Class B shares have dropped by more than 6% to $502. They are little changed from where they started the year.
Besides the stock’s weakness, Buffett’s wealth has dropped because of his philanthropy. In July, he announced that he had donated $6 billion in stock to nonprofit organizations started by his children. This contrasts with the past, when he channeled most of his giving to the Gates Foundation. Over time, Buffett has given away more than $48 billion to charity.
Berkshire Hathaway is in a Transition
Berkshire Hathaway is going through a transition phase. Buffett recently stepped down as the chairman, with Howard G. Buffett taking the position. He retains the Chairman Emeritus title.
Buffett also stepped down as the CEO on December 31st last year, with the position going to Greg Abel, who has been in the company for years.
Abel has made some major moves in the company. Its last earnings report showed that he has started to deploy its large cash holdings. He repurchased shares worth over $4.5 billion during the quarter, with the cash pile slipping to $365 billion.
At the same time, he started buying shares, deploying $20 billion in purchases. That was a big change as the company was selling shares in the previous 14 quarters. Its earnings showed that profits soared by 16%, helped by its energy, railroad, and manufacturing businesses, which helped to offset the weakness in the insurance business.
It has been a good year for other top billionaires. Elon Musk‘s wealth has jumped by $357 billion, helped by the SpaceX IPO. Alphabet co-founders Larry Page and Sergey Brin have added $25 billion and $23 billion, respectively, while Jeff Bezos has gained $23 billion. Other top gainers this year include Nvidia’s Jensen Huang, Dell Technologies founder Michael Dell, and ByteDance’s Zhang Yiming.
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